The International Monetary Fund (IMF) is optimistic that central banks will manage to bring inflation under control and avoid pushing the world economy into recession, warning, however, that growth remained weak and patchy.

In its quarterly World Economic Outlook published on Tuesday, the supranational lender said it forecasts global at three per cent this year. That is the same as the projection it made in its July update and higher than the April forecast of 2.8 per cent.

The IMF lowered the growth outlook for 2024 to 2.9 per cent from the three per cent growth registered in both April and July. However, the Fund warned that there are downside risks to its forecast. Such risks include further deepening of China’s real estate crisis, heightened volatility in commodity prices “under renewed geopolitical tensions and disruptions linked to climate change” and the deterioration of fiscal buffers in many countries.

Meanwhile, in the US, the minutes of the Federal Reserve’s interest rate-setting committee released on Wednesday show that the majority of the members who attended the September meeting are of the view that one more rate hike would “likely be appropriate” in the future. Other members argued that no more increases are needed.

While there were differing opinions on the need for more policy tightening, all members agreed that rates would need to stay high until the Fed is convinced that inflation is falling back to its two per cent target.

The Fed did not increase rates at the September 20 meeting for the second time this year, keeping its benchmark rate unchanged between the 5.25 and 5.5 per cent target range, still the highest level in 22 years. The central bank raised rates 11 times since March 2021 to fight record inflation that climbed last summer to its highest level in more than four decades.

Finally, in the UK, mortgage provider Halifax reported lower house prices in Britain as higher mortgage rates take their toll on the country’s property market and Britons find it increasingly harder to afford buying new homes.

Home prices fell by 4.7 per cent in September, the largest year-on-year decline since 2009. The average price of a typical home retreated to £278,601 from £292,197 in the same month last year. Halifax said that higher mortgage costs were likely to put more downward pressure on real estate prices into next year.

This article does not constitute legal and/or financial advice and is being issued for information purposes only by Bank of Valletta plc, 58, Zachary Street, Valletta. Bank of Valletta is a public limited company regulated by the MFSA and is licensed to carry out the business of banking and investment services in terms of the Banking Act (Cap. 371 of the Laws of Malta) and the Investment Services Act (Cap. 370 of the Laws of Malta).